Friday, February 16, 2007

Resolving inequality using global competition

Again, a disclaimer : this is just some personal thought, nothing to do with work!

This commentary by Dean Baker (written two months back) suggests that growing inequality is because workers at the top of the economy are getting more of the share of wealth creation. He goes on to argue for
trade policies that would make it as easy for hospitals and law firms to hire doctors and lawyers from India and China as it is for Wal-Mart to buy cheap shoes from the developing world.

I'm guessing that that means that if the lower-skilled workers' wages are being depressed by global competition, then exposing the highly-skilled to the same level of global competition should reduce inequality. So, if the doctor can opt to buy TVs which are manufactured in factories where wages have been diminished by global competition, then the factory workers should have the choice of getting medical care in clinics where the cost of consultation and medicine has also been similarly diminished by global competition, from e-consultation and internet pharmacies.

Seems a bit extreme, but I can see the logic...

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